Written Employment Agreement With Parent Company Does Not Preclude Implied In Fact Employment Agreement With Subsidiary.

The Federal Deposit Insurance Corporation [FDIC] issued a cease and desist order requiring an employer investment and loan company to replace its senior management and take other measures to improve its lending practices. The next month, plaintiff and the parent company of the employer entered into a written employment contract stating plaintiff would be employed as Senior Vice President, General Counsel and Chief Legal Officer. Two months after that, plaintiff was appointed interim President and Chief Executive Officer of employer, a subsidiary of the parent company. A new management team replaced plaintiff in several of his positions, although he was kept on to perform legal services. Plaintiff brought an action against the employer, alleging involuntary termination. His employment was then officially terminated by the employer. A jury awarded plaintiff $1,347,000 for breach of contract. On appeal, the court affirmed the judgment, finding substantial evidence supported the jury’s findings plaintiff was an employee of employer and that the written contract between plaintiff and the parent company did not preclude the existence of an implied in fact contract with its subsidiary, the employer. Faigin v. Signature Group Holding, Inc. (Cal. App. Second Dist., Div. 3; December 5, 2012) (Case No. B224598).